COMMONWEALTH BANK OF AUSTRALIA -v- KENNEY [No 2] [2016] WASC 415 (22 December 2016)

4 The plaintiff, the CBA, loaned money to Mr Kenney and Mrs Kenney. The loans were secured by a mortgage of the Property. The CBA commenced proceedings to recover the money said to be owing and for possession of the Property. On 11 August 2014 Master Sanderson concluded that Mr Kenney had no arguable defence to the claim and gave summary judgment for the CBA. The Master ordered that Mr Kenney pay to the CBA amounts owing under the loans. The Master further ordered that Mr Kenney, within 28 days, deliver up to the CBA, as mortgagee pursuant to the mortgage, vacant possession of the Property (the Possession Order).

5 Mr Kenney did not deliver up possession of the Property. On 18 September 2014 pursuant to pt 5 div 1 of the Civil Judgments Enforcement Act 2004 (WA) (CJE Act) the court issued a property (Seizure and Delivery Order) authorising the sheriff to enter the property named in the order, with force if necessary, evict persons not entitled to be there, take possession of the property and deliver it into the possession of the CBA (the PSDO). On 16 October 2014 the Sheriff's officer attended at the Property with agents of the CBA to take possession of the Property. The PSDO was executed and by its agent the CBA received full, quiet and peaceable possession of the Property. The Sheriff's officer affixed a number of notices to the windows of the residence on the Property stating:

Property (seizure and delivery) order no: SC/CIV/PER/CIV/1869/2013

Under the Authority of the above Property (Seizure and Delivery Order) issued out of the Supreme Court on 18 September 2014 possession of lot 1433, lot 446 & lot 1538 Magagnotti Road Salmon Gums was given to Commonwealth Bank of Australia on Thursday 16 October 2014 at 4.20 pm. Entry to these premises without permission of Commonwealth Bank of Australia may lead to police prosecution.

6 On 15 October 2014 Mr Kenney lodged an appeal against the Possession Order and applied to suspend enforcement of the PSDO. His application to suspend enforcement of the PSDO was dismissed on 15 December 2014. His appeal against the Possession Order was dismissed by the Court of Appeal on 15 March 2016. The CBA took no steps to sell or otherwise deal with the Property until the appeal had been resolved.

7 In March and April 2016 there were a number of communications between the CBA, its agents and solicitors, on the one hand and Mr Kenney on the other. In those communications Mr Kenney indicated that he would not provide physical possession or occupation of the Property to the CBA voluntarily and if the CBA's agents attempted to take physical occupation they would be trespassing. On 13 May Mr Hayes, an agent of CBA, informed Mr Kenney by email that he would be attending the Property. On that day Mr Kenney telephoned Mr Hayes and stated that Mr Hayes was not to come onto the Property. On 16 May Mr Kenney sent an email to Mr Hayes attaching a copy of a warning not to trespass on any of 'my' properties located on Magagnotti Road, Salmon Gums and stating that the warnings would be posted at all entrances to the property. The email stated:

You are not empowered by any jurisdiction to attend my property tomorrow the 17th May 2016.

8 On 17 May Mr Kirman, an agent of the CBA, and Mr Hayes attended at the Property for the purpose of taking physical possession. As they approached the entrance to the Property, a group of about 10 people were gathered at the entrance. Vehicles and farm equipment were blocking Magagnotti Road such that Mr Kirman and Mr Hayes could not access the entrance to the Property. Mr Kirman spoke to Mr Kenney. Mr Kirman said that he and Mr Hayes were there to take physical possession of the Property and asked Mr Kenney whether he would vacate the property voluntarily and provide physical possession to the agents. Mr Kenney said that he would not provide possession of the Property to the agents. Mr Kenney read from a piece of paper that he considered the PSDO invalid as it should have been renewed every 12 months and that there were inaccuracies in court and other documents regarding the description of property lots.

9 The 'inaccuracies in court and other documents regarding the description of property lots' refers to an error in the description of one of the lot numbers. The second lot was described in the Possession Order and the PSDO as lot 446 on deposited plan 202810. That is, the lot number was incorrectly described as lot 446 rather than lot 466. The orders correctly described the volume and folio number of the certificate of title in relation to lot 466.

10 On 31 May 2016 the CBA applied for further orders by summons. At a hearing on 16 June 2016 orders were made correcting the description of the lot number in the Possession Order and the PSDO. The CBA's applications were further heard on 19 July 2016. On 29 July I made orders that included orders pursuant to s 99(2) of the CJE Act to the effect:

(a) the CBA, by its employees and agents may from 15 August 2016, enter upon and take physical possession of and occupy the Property; and

(b) Mr Kenney, whether by himself, his employees, his agents, or otherwise, is restrained from preventing or obstructing the CBA from entering onto, taking physical possession and occupying the Property.

11 In August 2016 there were further communications between representatives of CBA and Mr Kenney and his son, Kevin Kenney. Mr Kenney commenced an appeal from the orders made on 29 July 2016 and applied for a stay of those orders. The application was supported by an affidavit that annexed a copy of a document that was described as a lease between Mr Kenney and Kevin Kenney dated 11 January 2016. The application for a stay was the first time that Mr Kenney or Kevin Kenney had asserted to the CBA, or its representatives, the existence of the purported lease.

12 On 24 August Mr Kirman and Mr Hayes, as agents of the CBA, attended at the Property. Kevin Kenney and others were at the entrance of the Property. The road into the Property was obstructed by farm machinery. Kevin Kenney refused the CBA's agents entry onto the Property.

13 The CBA's summons for orders that Mr Kenney be committed for contempt of court was set down for hearing on 17 November 2016. Mr Kenney did not appear. On the morning of 17 November Kevin Kenney informed the court that Mr Kenney was unable to appear because he was in Esperance Hospital. I adjourned the application to 18 November and then again to 12 December.

14 On 12 December Mr Kenney was represented by counsel who was instructed by a solicitor retained by Mr Kenney. Mr Kenney pleaded not guilty to the charge of contempt. Counsel for the CBA, Mr Feutrill, then commenced the case for the CBA. Mr Feutrill read into evidence a number of affidavits which adduced evidence of the matters I have referred to in these reasons. Counsel for Mr Kenney informed the court that Mr Kenney had reconsidered his plea and asked that the charge be put to Mr Kenney again. The charge was put to Mr Kenney again and Mr Kenney changed his plea to guilty.

15 The question of punishment for a contempt is a matter within the discretion of the court. The Sentencing Act 1995 (WA) does not apply to or in respect of a person being punished for contempt of court: Allbeury v Corruption and Crime Commission [2012] WASCA 84; (2012) 42 WAR 425 (Buss JA) [215].

16 In Allbeury at [216] Buss JA cited with approval the statement of Dunford J in Wood v Staunton [No 5] (1996) 86 A Crim R 183 at 185 that relevant matters for consideration in assessing the proper punishment for contempt include:

1. the seriousness of the contempt proved;
2. whether the contemnor was aware of the consequences to himself of what he did;
3. the actual consequences of the contempt on the relevant trial or inquiry;
4. whether the contempt was committed in the context of serious crime;
5. the reasons for the contempt;
6. whether the contemnor has received any benefit by indicating an intention to give evidence;
7. whether there has been any apology or public expression of contrition;
8. the character and antecedents of the contemnor;
9. general and personal deterrence; and
10. denunciation of the contempt.

Buss JA further observed that because the offence of contempt is essentially criminal in nature, a decision as to the appropriate punishment for the contemnor must take into account factors ordinarily relevant to the punishment of criminal offences generally and the offence of criminal contempt in particular.

17 Counsel for Mr Kenney made submissions including the following. Mr Kenney did not abuse, insult or denigrate the CBA or its representatives or agents. After the Sheriff's officer seized possession of the Property on 16 October 2014 Mr Kenney did not reside at the property but he entered the property and used it for the purposes of a trucking business he operates. Mr Kenney made inquiries of a solicitor and was informed that a property seizure and delivery order expires, if not renewed, after 12 months. Mr Kenney believed that when 12 months expired after the making of the PSDO without the CBA selling or otherwise dealing with the Property, the PSDO expired and ceased to have effect. Mr Kenney believed that thereafter he was entitled to possession of the Property and the CBA had no right to possession of the Property or right to enter the Property. Mr Kenney has assets including a residential property in Mosman Park but his assets are encumbered such that he has no or no significant net assets. This case is similar to Perpetual Trustees Victoria Ltd v Allen [2012] WASC 258 and it would be appropriate to impose a penalty similar to that imposed by Beech J in that case. In that case Beech J imposed a fine of $500 suspended for six months.

18 Counsel for CBA made submissions which include the following. The CBA's primary concern has been to enforce the PSDO so that it may realise the Property and apply the net proceeds of any sale to the debt owed to the CBA. Committal to prison is not appropriate. A suspended fine is an appropriate punishment.

19 Civil contempt has a dual nature. It is a means for coercing the contemnor to obey an order of the court and thereby enforce the rights of the plaintiff. But its purpose is also to protect the due administration of the courts by upholding the authority of the court.

20 Mr Kenney, through his counsel, has informed the court that he no longer occupies the Property, has no assets on the Property and will not take any steps to impede the CBA entering or dealing with the Property. Mr Kenney says that the Property is now occupied by his son and that is a matter beyond his control. In those circumstances, any punishment imposed by the court will not have the effect of coercing Mr Kenney into complying with the orders of the court.

21 So far as the CBA is concerned, the damage has been done. Mr Kenney has excluded the CBA from the Property and prevented it from entering the property for the purpose of realising it. Mr Kenney has put Kevin Kenney in occupation of the Property in so far as he purported to grant to Kevin Kenney a lease of the Property. Mr Kenney says that that was pursuant to some earlier unspecified oral arrangement.

22 One course open to the court is to impose no punishment. However, that is not appropriate in this case. Mr Kenney has disobeyed the order of the court and in doing so has caused harm to the CBA. Counsel for Mr Kenney says that Mr Kenney has not deliberately flouted the authority of the court in that he excluded the CBA from the Property because he believed, albeit erroneously, that on the expiry of 12 months from the making of the PSDO the CBA ceased to be entitled to possession of the Property notwithstanding that the Sheriff's officer had seized possession of the Property from Mr Kenney and delivered it to the CBA.

23 A property (seizure and delivery) order operates for 12 months after the day on which it is made or issued: CJE Act s 102(1). Mr Kenney says that he was told by a solicitor that a property (seizure and delivery) order ceases to operate after 12 months. That is correct but irrelevant. Mr Kenney did not identify the solicitor from whom he had obtained the information. No competent solicitor would have told Mr Kenney that where a property (seizure and delivery) order has been executed and possession has been given to a judgment creditor, the registered proprietor becomes entitles to resume possession of the property 12 months after the day on which the property (seizure and delivery) order was made if the judgment creditor has not sold or otherwise dealt with the property in the meantime. Mr Kenney did not claim to have been given such advice. Mr Kenney did not seek or obtain advice relevant to the circumstances of this case. Mr Kenney's action in resuming possession of the Property and excluding the CBA or its agents from the property was not based upon any relevant legal advice. Mr Kenney's action was high handed and reflects his refusal to accept that the CBA was entitled to possession of the Property notwithstanding the judgment and orders of this court.

24 Having regard to the fact that Mr Kenney no longer occupies the Property, has no assets on the Property and will not take any steps to impede the CBA entering or dealing with the Property, it is not appropriate to impose a term of imprisonment.

25 The appropriate punishment is a fine. In view of Mr Kenney's apparent financial circumstances a fine of $1,000 is appropriate. In accordance with the submissions of both counsel the fine should be suspended for 12 months. If, at any time during that 12 months, Mr Kenney should prevent or impede the CBA entering upon or being in possession of the Property or aid, abet, counsel or procure someone else doing so the fine will become payable.